OTA Dispatch Issue 2, 2021

28 Oregon Trucking Associations, Inc. Oregon Truck Dispatch session of the Legislative Assembly any adjustments to the flat fee rates that the department and the commission deem appropriate. The basis for any such recommendation is the premise that the flat fee filers taken altogether (as opposed to consideration of individual taxpayers) should be paying what they would have paid had they reported and paid on a traditional mileage and weight basis. So what is this “Flat Fee Study” and what does the most current iteration of this legislatively mandated study reveal? Within specific limitations, carriers of wood chips, sand and gravel and logs, may elect to pay a “flat fee.” Separate flat fee rates are provided for each of these commodity-types. When comparing available data for these commodities, flat fee vs. on a mileage basis, a substantial underpayment was identified when the flat fee was used by both sand and gravel and log haulers; however, depending on some additional variables, log haulers may have overpaid. There were no flat fee records available for wood chips in 2019. Just another sign of the numbers game when it comes to flat fees. Should these be consistent findings, year over year, the current flat fee study should logically result in ODOT putting forth a recommendation to adjust the flat fees rates to not let things, as Leith stated, “get further out of whack.” Movement in the rates is always going to be triggered by the large fleets because we are dealing with averages and the large fleets drive the numbers. Historically, fleets filing on flat fees with five or fewer trucks make up 87% of all fleets filing on flat fees. However, those 87% of the population of flat fee filers only pay 39% of the total amount paid in flat fees. Inversely, 13% of flat fee filers operate fleets of six or more trucks (26% operate fleets of over 25 trucks) and together pay 61% of the total flat fees collected. Looking only at the population of fleets with over 25 trucks, that 1% of the population is paying fully 26% of all flat fees collected. It is easy to see which fleets are impacting this calculus. I’m hard pressed to think that haulers with larger fleets lack the sophistication to calculate and choose the least cost tax option. For the sake of argument, let’s assume their choice is random. Doesn’t the arithmetic argue for the same result? Under the explicit existing statutory language, it cannot be the case that there is an economic advantage associated with use of flat fees appropriately garnered in an economic recessionary period that should be allowed to continue or at least work itself out. To take no action to adjust rates equates to an unintended subsidy that was at the heart of the ATA weight mile tax lawsuit. At best, this is a balancing test that the legislature must make. It can choose to wait. It must consider the risk associated with that choice. If there is no plaintiff waiting in the wings, the risk is small. If there is a plaintiff, the DOJ trial attorneys are identifying a risk is present. That is the DOJ view. The legislature is the decision maker. ODOT is asked to provide the data and a recommendation. Neither ODOT nor the Legislature has paid close attention to this subject in recent years. Flat Fees, cont.